Archive for July, 2007

We responded to the Silverback acquisition by Dell by offering Silverback MSP partners a safe haven and a cost free migration to NimBUS. In addition, we will be making a charitable donation to the World Wildlife Fund to help protect the real Silverback Gorillas for every Silverback MSP that migrates to NimBUS. Thanks to eWeek for this great write up

http://www.eweek.com/article2/0,1895,2160739,00.asp

Nimsoft Offers to ‘Save the Silverback’

By Jessica Davis
July 19, 2007

Nimsoft, a self-described service level management platform provider, is painting itself as the white knight for managed service providers distressed by Dell’s acquisition of platform provider SilverBack Technologies.

The company, based in Redwood City, Calif., is offering to save SilverBack MSPs by offering them the same level of managed services at the same price they received from SilverBack?and the company will do the entire conversion for free.

“In real life, the SilverBack is actually a male gorilla, which is an endangered species,” said Gary Read, CEO of Nimsoft. “We think the SilverBack MSP is about to become an endangered species as well, so we are launching a Save the SilverBack MSP program.”

Read is offering Nimsoft’s own staff to do any conversion work for MSPs and their customers from SilverBack to Nimsoft. Typically that will include a trip out to any MSP that takes the company up on its offer.

Once the conversion occurs and customers are up and running?for the same price as they paid to SilverBack?they will always have the option of upgrading to a higher level of service from Nimsoft.

“SilverBack offers up-down type monitoring,” Read said. “That is truly a commodity. The higher value is monitoring of applications and services that make up those applications. No one cares whether the server is up or down. They care what effect that has on their business application.”

Read said the offer will run through the end of the year. At that point, Nimsoft will evaluate whether or not to renew it.

“SilverBack MSPs are waking up to the news of the Dell acquisition today and they will be getting together in the next few weeks and months to decide where to take their businesses,” Read said. “The people who want to offer higher value services will probably decide that by the end of the year.”

Nimsoft can offer those MSPs comparable services to what they are receiving today at the same price, and then “they can use the additional functionality available from Nimsoft to sell higher value services to customers and protect their businesses from commoditization.”

And while Read would not guarantee that his company was immune to being acquired, he said Nimsoft was more likely to purchase other companies than be acquired itself.

The privately-held company expects $21 million in revenues this year and is growing at a 60 percent to 70 percent rate. It is profitable and has about 450 customers, most of them enterprise customers. About 150 of its customers are MSPs.

Read would not comment on whether he’d also been approached by Dell as an acquisition target.

“On the surface the SilverBack acquisition makes a lot of sense for Dell,” Read said. “The interesting thing is going to be how Dell manages to scale this business. They can either sign up thousands if not tens of thousands of channel partners. Or they can take this through their direct model.”

Having slept on this for a night, it seems as this acquisition can be nothing but bad news for Silverback’s MSP partners. Let’s imagine the possible scenarios for a minute and see where this could be going.

First, we need to understand that Silverback’s current revenues do not move the needle for Dell. If Dell are going to get serious about managed services, then they will need to turn this into a business that generates hundreds or thousands of times the revenues of today. How can they do that?

Are they interested in the MSP partner that is currently giving Silverback say $5,000 a month? Hmm, if they are going to remain interested in that type of partner, then they are going to have to scale to thousands or tens of thousands of them. Do I expect that to happen from a company that has traditionally been the “anti-channel”? Absolutely not. Even with the best intentions, it will take Dell forever to be able to understand and build an internal organization capable of supporting that and repair their reputation with the channel.

So, what’s the alternative? The alternative is that Dell uses Silverback through its direct to customer approach and in fact starts to “pre-load” Silverback on to all of the servers etc that Dell sells. “Have a few months of free monitoring and then pay us $50 a month to continue…”. Seems that this is a much more likely scenario, Dell knows how to scale a massive direct organization

Dell deals in commodities and likely they will try and commoditize the delivery of remote Managed Services. This is horrible news for many MSPs, particularly those using lower end platforms such as Silverback, N-Able, Level Platforms or Kaseya.

MSPs need to avoid commoditization and in order to do so need to move up the stack and offer more value added services to their customers. Beyond basic up/down monitoring but more application monitoring and Service Level Monitoring. The good ones have already figured this out.

The rest…..well, good luck in competing for commodity business against Dell.

Today, Nimsoft has one less “competitor”. Silverback Technologies that have been around for what seems like forever and yet have failed to make any meaningful market impact in the MSP space, announced that they were being acquired by Dell.

The acquisition underscores the growing importance that major vendors are placing on the Managed Services space in which Nimsoft has an ever growing base of leading MSP partners.

Nimsoft will announce our Q2 results next week and they are amazing!!!!

Dell To Buy MSP Platform Vendor SilverBack

By Staff, CRN
5:01 PM EDT Wed. Jul. 18, 2007

PC maker Dell said Wednesday it had reached a deal to buy MSP platform vendor SilverBack Technologies, throwing itself into the managed service provider market as it seeks to expand its remote service and management lineup.

Round Rock, Texas-based Dell said it “plans to leverage SilverBack Technologies, Inc. into its operations as part of its ongoing strategy of IT simplification.” The deal comes little more than a week after Dell Chairman and CEO Michael Dell told reporters that acquisitions would be an ongoing part of the company’s turnaround strategy — a turnaround he said at the time was still not finished.

SilverBack, based in Billerica, Mass., saw itself become a major player in the channel over the past two years by aggressively slashing pricing for its remote IT monitoring and management technology to VARs. It cut prices at a time when a growing number were entering the MSP segment.

Reached by phone, Silverback CEO Dan Phillips would not go into specifics when asked about the impact of the acquisition on the MSP platform vendor’s channel partners.

“I can’t answer that. I can say that it’s a very positive impact on the company and on the channel,” Phillips said. “We’re doing very well. We’re extremely pleased with the situation.”

Several MSPs contacted by ChannelWeb were surprised by the move.

“My emotions are all over place, but my gut is it’s a good move,” said Bill Hood, president of Network Partners, a Dallas-based MSP, who heard the news from a reporter. Network Partners uses Silverback’s platform to provide managed services to customers and is also a longtime Dell partner, Hood said.

“Dell has the chance to take this product big time. If we can ride on those coattails, that’s good,” Hood said. “My only concern is that they’ll want to sell it to the masses. Silverback is not shrinkwrapped stuff you can sell on Dell.com.”

Russ Bryant, vice president of manged services at Datotel, a St. Louis-based MSP, said he had concerns about the Dell deal. “Anytime there’s change you have some concerns, but I don’t think this will be anything but good,” Bryant said. “It allows SilverBack to stay ahead of the pack. It means lots of R&D and an expansion of their base. I think Dell will help them will all their things.”

Bryant added that his concerns don’t have anything to do with Dell’s direct legacy or the possible commoditization of managed services offerings. “I think that’s a little close minded. Dell is big, but it doesn’t mean they’re bad,” bryant said. “They’ll take the product to the next step and help separate SilverBack from the people they’re competing against. It might allow them to compete against the CAs of the world and some other people like that.”

Still, Todd McKendrick, vice president of sales at Do IT Smarter, said he hopes that things will stay the same. Do IT Smarter uses the Silverback platform to offer smaller VARs a hosted managed services offering they can resell to their customers.

“We’ve had no indication things would change from the executive team at Silverback,” McKendrick said. “Silverback has always been about true partnership, unlike other software partners where they just want to sell you a license. If they can maintain that mantra with Dell, then that’s great. Dell may have a different agenda. We’ll just have to wait and see how things will fold out.” Though details of Dell’s buyout of SilverBack were not immediately available, a Dell spokesman said the company is committed to continuing the change from a direct model to selling through solution providers in the channel, and said Dell was still committed to expanding its strategy of providing enhanced, remote support to customers.

An email received from one of our largest customers the other day. Anyone that reads my blog will know that this kind of email reflects exactly the philosophy of Nimsoft.

Gary ?

We are very excited to have Nimsoft as long-term partners. We have very few truly Amazing vendors, and I?m happy to say that Nimsoft is one of them. Your team has been consistently supportive and responsive to our needs, and you and Paul have been superb to work with on this deal. This deal is mutually beneficial to all parties and really sets us up for a long and prosperous future.

We again had an amazing quarter ending in June. The company hit its aggressive growth targets both in terms of revenue but also new customer wins.

I spent the last couple of days in Europe with the sales team, and thought I’d share a couple of customer emails that were presented by one of the European sales reps as “Why I bought NimBUS” – these are from two Managed Service Providers. I want to point out one thing that both customers mention….which is the SUPPORT and KNOWLEDGE of our technical team. Well done – this is exactly who we strive to be.

First customer…

1 Integrated SLM platform

2 Ease of deployment

3 Mid Market suitability

4 Flexibility & Support of Nimsoft

5 Integration capability with our existing toolset

Second customer…

1 Extremely well informed and able support team (in comparison to N-Able. Kaseya etc) ? who were contactable and responsive

2 Perception that this is a product that allows us to pitch at a higher level (other platforms definitely targeting SME Market)

Means that our ?story? is so much more compelling to larger customers

3 Perception that Nimsoft are actually able and willing to help with installation & Customisation if required ? again driven from feedback that the technical contacts at Nimsoft ?really? understand their product and how it fits.

4 Persistent yet professional Sales/account Management, who took the time to come to site

5 Pricing means that even though nimbus is still more expensive than the previously mentioned vendors, It is within reach at a sensible price.